Renewing Your Car Insurance Policy – Here Are Some Tips to Save Money

Car Insurance Policy

You can save on the car insurance prices, while renewing your car insurance policy. Rise in road accidents, mandatory third-party insurance, and considerable investment involved in buying the car, makes it vital to have a car insurance. However, there are ways to reduce your premiums by several methods such as no-claim bonus, comparison of benefits, and others. You can even save while buying the car insurance online.

Car insurance is a contract that needs to be renewed yearly. All insurance companies allow a minimum of 45 days before the expiry of the existing policy, to initiate the car insurance renewal process.

The new car insurance policy comes into effect only when the existing policy expires. This is applicable to both the existing customers, and those who wish to switch their insurers. You can renew your car insurance online, as well as reduce your car insurance prices.

Here Is How to Save Money While Renewing Your Policy

No-Claim Bonus:

While renewing the car insurance, you can get a no-claim bonus (NCB), if you haven’t made any claim in the preceding 1 to 5 consecutive policy years. The bonus gets adjusted against the premium, bringing the car insurance prices down. NCB is based on own-damage component of the premium. The minimum and the maximum discount is 20% and 50% respectively.

Number of Claim Free Years Discount % on Own-Damage Premium
No claim made during the full preceding insurance policy year 20%
No claim made during two consecutive preceding policy years 25%
No claim made during three consecutive preceding policy years 35%
No claim made during four consecutive preceding policy years 45%
No claim made during five consecutive preceding policy years 50%

Insured Declared Value

The value of your car decreases every year, owing to the depreciation factor. Insured Declared Value (IDV) is calculated as market value of your vehicle minus the depreciation. Higher IDV, means higher premium. If you know the accurate IDV of your car, you can negotiate the premiums.

Voluntary Deductible Limit

You get liberty of selecting a voluntary deductible limit. This limit refers to the amount that a policyholder is ready to bear from his own pocket. If you take a voluntary deductible limit, the motor insurance company will offer discount.

Member of Automobiles Association of India or Western India Automobile Association

Insurers offer discount on renewal of your car insurance policy if you are a member of Automobiles Association of India (AAI) or Western India Automobile Association (WIAA). Membership of AAI or WIAA can help you reduce your car insurance premiums.

Check Features and Compare Policies

Peruse the benefits and the features of the car insurance policy. It will help you avoid duplication, and thus reduce the car insurance prices. For example, if your car manufacturer is providing Road Side Assistance (RSA), then you can choose to forgo it as a part of your car insurance policy. This will help in reducing your premium.

It is financial prudence to compare car insurance online and then only make a wise decision. You can use the car insurance calculator to evaluate your car insurance costs. Most of the car insurance companies have car insurance estimator that help compare premiums vis-a-vis the benefits offered.

Do not let your car insurance policy expire. If you renew the policy within 45 days in advance, you will not have to pay higher premium, if there is a hike in the premiums later.

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